President Nicolas Sarkozy of France seized the reins of the European Union last night, pledging to turn the EU's crisis of confidence into an opportunity to make the unloved union more popular with almost half a billion Europeans.

The Eiffel Tower was lit up and the clear night sky in Paris bathed in the blue and golden glow of the EU as other leaders in the 27-member club braced themselves for six months of hyperactive French stewardship.

Sarkozy went on national television to outline his intentions, portraying himself as Europe's guardian in a time of anxiety and confusion. "We must not be afraid of the word protection," he declared. "We have to reflect on how to turn Europe into a means of protecting Europeans in their everyday lives."

He said there had been mistakes in the way the union had developed. "We have to profoundly change our way of building Europe."

During France's presidency of the union Sarkozy hopes to reverse Europe's current mood of gloom by delivering ambitious and popular policies to combat climate change, cushion consumers against soaring food and fuel prices, and take tough action against illegal immigration.

Senior French officials conceded that they were inheriting the EU presidency at a difficult juncture, its confidence battered by Ireland's rejection last month of the Lisbon treaty, the blueprint for streamlining the way the union will operate and take decisions in the future.

The Irish no vote has cast a cloud over the French presidency, but is also concentrating minds and forcing EU leaders to question where they are going wrong.

"No one understands [Europe's] institutions and no one's interested in them. Even I don't," said Bernard Kouchner, the French foreign minister. "When Europe can't do anything about high oil prices, Europeans are not bothered about another reform treaty."

With the EU mired in confusion, Sarkozy is relishing the chance to restore France to the European leadership role it forfeited under the latter years of Jacques Chirac. He is sparing no expense in the endeavour, budgeting almost €200m (£158m) to fund the six-month presidency, vastly outspending his predecessors.

Apart from seeking to salvage the Lisbon treaty by coaxing the Irish government into staging a high-risk second referendum, Paris has laid down four priority policies for the EU - climate change, immigration, food and farming, and defence. "These are the issues of urgency," said the prime minister, François Fillon.

The EU has spent the past 15 months refining the world's most ambitious global warming package - aiming to cut greenhouse gas emissions by a minimum of 20% by 2020. But national leaders need to cut a deal at a summit in December to meet a deadline of next spring for the measures to become European law. If they fail the EU will be unable to lead the campaign for more radical action at international negotiations next year.

The EU's credibility is at stake, said the French energy and environment ministry. "Europe will not be able to demand global distribution of the effort among all the countries if it is not capable of organising it among the 27." But east European countries are resisting, the Germans are pleading for special treatment, and there are deepening doubts about biofuels.

Sarkozy's "immigration pact", creating a European system of controlled legal immigration and facilitating the deportation of illegal migrants, has already been watered down after running into opposition in Spain and elsewhere. It has better chances of prompt acceptance and should be finalised at an EU summit in October.

The crisis wrought by spiralling food and fuel prices looks likely to stymie any meaningful reform of the EU's perennially contested Common Agricultural Policy.

French ministers are calling for action to shore up industries especially vulnerable to oil price rises, such as the transport and fishing sectors. Sarkozy also wants to cut VAT on fuel. He is opposed by Germany, Britain and the European commission.

Paris has also singled out European defence as a priority. It wants to establish a 60,000-strong EU rapid intervention force and "update" Europe's security strategy, and hopes to gain support for a "permanent European planning capacity" or small EU operational headquarters in Brussels. This is opposed by the EU's other main military power, Britain.

Neutral Ireland's rejection of the Lisbon treaty is also likely to mute the defence ambitions, as voters there appear allergic to any talk of a European military.

Sarkozy is to launch his attempt at a political fix to the Irish quandary next week by travelling to Dublin. If the Irish no vote dents Sarkozy's EU presidency his biggest prize would be the climate change accord in December. If there is no agreement, or a rotten compromise, that would be his biggest failure, exposing the mismatch between EU rhetoric and reality.

An opinion poll last week showed that 33% of French people viewed the EU as a source of fear, while only 30% saw it as a source of hope.